Don’t sell in panic, Chidambaram to investors

New Delhi, Oct 23 (IANS) As Indian equities fell once again on weak global cues, Finance Minister P. Chidambaram Thursday asked investors not to sell in panic, and to believe in the country’s strong economic fundamentals.”Nobody should sell in panic,” the minister told reporters, as a key Indian equities index fell nearly four percent on fears of US recession and overall global slowdown.

“There is no reason for the Indian market to go down just because Eastern markets are down,” he said outside parliament.

His comments came just two days after Minister of State of Finance Pawan Kumar Bansal said that barely two percent of Indians invested in stocks and that losses or gains from the markets were purely notional.

“As regards the stock markets, it must be noted that the loss or gain arising from market movement is notional,” Bansal had told the Rajya Sabha, the upper house.

“In this context, it may also be mentioned that only a very small portion of our total population, less than two per cent, has any sort of exposure to the stock market.”

The remarks by Chidambaram Thursday appeared to have had no impact on the market mood, as the sensitive index (Sensex) of the Bombay Stock Exchange (BSE) closed with a loss of 398.20 points, or 3.92 percent.

The finance minister said the markets watchdog had told foreign institutional investors (FIIs) that it did not approve their lending and borrowing of Indian stocks overseas as it was causing a weakness in the domestic money markets.

“I am told that those transactions are likely to be reversed in the next few days,” he said, referring to the feedback from the Securities and Exchange Board of India (SEBI), based on the missive to foreign funds.

“SEBI found one misuse of the window - maybe not misuse - but one use of the window which is not quite appropriate.”